Evaluation of Strategic Planning and Its Influence in the Performance of Commercial Banks in Nigeria
Chapter One
Objective Of The Study
The major focus of this study is to evaluate strategic planning and its influence on enhancing the performance of commercial banks. Specifically, the study will be channeled to:
- Determining whether there is a relationship between strategic planning and the organizational performance of commercial banks
- Determining whether strategic planning significantly influences the competitive advantage of commercial banks.
- Ascertaining whether strategic planning positive increase the profitability of commercial banks.
- Ascertaining whether strategic planning aids the growth of commercial banks
CHAPTER TWO
REVIEW OF RELATED LITERATURE
Conceptual and Theoretical Issues Concept of Strategic Planning
Strategic planning is a forward –looking exercise and all managers should be involved with it (Owolabi&Makinde, 2012). It creates a conceptual framework that incorporates the external environment characterized by risk, change and uncertainty into the company’s long term decision. Strategic planning occurs at top level in an organization involving a long term forecast upon the major goals of an organization. It is a chosen course of action for pursuing and accomplishing objectives (Falilat, 2013). Strategic planning is designed to achieve the firms vision and mission, which consist of four major steps: analysis; formulation; implementation and adjustment/evaluation (Piffs& Lei, 2003). Previous studies (Adeleke, 2001; Alaka, Abass&Tijani, 2011) acknowledged that properly structured plan enables management to comprehend the relationship of goals, objectives and action attainment, hence, strategic planning focuses on long range objectives and short-term priorities.
Performance
Performance is refers to the action or process of carrying out or accomplishing an action, task, or function. Performance comprises both a behavioural and outcome aspect. It is a multi-dimensional and dynamic concept. Borman and Motowidlo study (as cited in Sabine & Michael, 2002) distinguished between task and contextual performance. Task performance refers to an individual’s proficiency with which he or she performs activities which contribute to the organization’s ―technical core‖, while contextual performance refers to activities which do not contribute to the technical core but which support the organizational, social and psychological environment in which the organizational goals are pursued, including making suggestions about how to improve work procedures. This requires the alignment of strategic and operational objectives and the firms set of activities in order to manage performance (Okpara, 2014). Summarily, performance is the accomplishment of a given task measured against present known standards of accuracy, completeness, cost and speed.
Commercial Bank
Commercial Bank is a financial institution providing services for business organizations and individuals. Services include operating current, deposit and savings accounts as well as giving out loans to businesses, thereby, taking the debts of other people in an exchange and this, create money (Crowther’s work in Smiti, 2014). It is visualized as an organization whose principal operations are concerned with the accumulation of the temporarily idle money of the general public for the purpose of advancing to others for expenditure (Kent concepts, as cited in Smiti, 2014).Thus, a commercial bank is an institution which accepts deposits from the public and in turn advances loans by creating credits.
Profitability
Traditionally, profit maximization is the goal of every business organization. When management of firms makes enough profits the shareholders and other investors are happy and satisfied, and the firm is in a better position to meet the demand of other interest groups. Profitability in banks becomes necessary for cost absorption, reinvestment, attracting further financing, retention of public confidence and motivation of expansion (Anyanwaokoro, 2008). Profitability indices are the ones that give the net result of all policies, activities and decision of the company, being the efficiency of a company at generating earnings, that is, ―how much they make from what is taken in‖ (Nzewi, 2004).
CHAPTER THREE
RESEARCH METHODOLOGY
INTRODUCTION
In this chapter, we described the research procedure for this study. A research methodology is a research process adopted or employed to systematically and scientifically present the results of a study to the research audience viz. a vis, the study beneficiaries.
RESEARCH DESIGN
Research designs are perceived to be an overall strategy adopted by the researcher whereby different components of the study are integrated in a logical manner to effectively address a research problem. In this study, the researcher employed the survey research design. This is due to the nature of the study whereby the opinion and views of people are sampled. According to Singleton & Straits, (2009), Survey research can use quantitative research strategies (e.g., using questionnaires with numerically rated items), qualitative research strategies (e.g., using open-ended questions), or both strategies (i.e., mixed methods). As it is often used to describe and explore human behaviour, surveys are therefore frequently used in social and psychological research.
POPULATION OF THE STUDY
According to Udoyen (2019), a study population is a group of elements or individuals as the case may be, who share similar characteristics. These similar features can include location, gender, age, sex or specific interest. The emphasis on study population is that it constitutes of individuals or elements that are homogeneous in description.
This study was carried to examine evaluation of strategic planning and its influence in the performance of commercial banks in Nigeria. GTB, Asaba forms the population of the study.
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
INTRODUCTION
This chapter presents the analysis of data derived through the questionnaire and key informant interview administered on the respondents in the study area. The analysis and interpretation were derived from the findings of the study. The data analysis depicts the simple frequency and percentage of the respondents as well as interpretation of the information gathered. A total of eighty (80) questionnaires were administered to respondents of which only seventy-seven (77) were returned and validated. This was due to irregular, incomplete and inappropriate responses to some questionnaire. For this study a total of 77 was validated for the analysis.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
Introduction
It is important to ascertain that the objective of this study was to ascertain evaluation of strategic planning and its influence in the performance of commercial bank in Nigeria. In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challenges of evaluation of strategic planning and its influence in the performance of commercial bank in Nigeria
Summary
This study was on evaluation of strategic planning and its influence in the performance of commercial bank in Nigeria. Three objectives were raised which included: Determining whether there is a relationship between strategic planning and the organizational performance of commercial banks, determining whether strategic planning significantly influences the competitive advantage of commercial banks, ascertaining whether strategic planning positive increase the profitability of commercial banks and ascertaining whether strategic planning aids the growth of commercial banks. A total of 77 responses were received and validated from the enrolled participants where all respondents were drawn from selected GTB, Asaba. Hypothesis was tested using Chi-Square statistical tool (SPSS).
Conclusion
The study conclude that there is a weak positive relationship between the total assets and Profit After Tax of individual and collective commercial banks studied. The low coefficient of determination between the dependent and independent variables confirms the weak association between the total assets and profit after tax of the focused commercial banks
Recommendation
Sequel to the findings and conclusion, it is recommended that strategic planning should be properly instituted and robust implementation of the various steps in order to enhance high profit performance of the selected commercial banks. The assets of the focused banks need to be evaluated so as to identify those that have potential for profitable investment and the ones that require divestment.
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